If you are shopping for a used car in 2026, you have probably noticed that prices are not falling the way many people expected. After years of post-pandemic volatility, the used car market has settled into a new pattern - prices are stable but stubbornly high, propped up by an ongoing shortage of stock that is not going away any time soon.
On top of that, the conflict in the Middle East has sent oil prices surging past $100 a barrel since late February 2026, pushing petrol and diesel costs sharply higher. That is adding a new layer of pressure to the market - and it could change the picture for used electric vehicle prices too.
The core reason is straightforward - there are not enough used cars to go round, especially in the age brackets that buyers want most.
During the pandemic, new car production dropped sharply. Factory shutdowns and a global semiconductor shortage meant roughly 2 million fewer new cars were registered between 2020 and 2022 compared to normal years. Those missing cars are now creating a major gap in the used car market.
According to Auto Trader, there are around 1.8 million fewer 3-5 year old cars available in 2026 compared to 2019. This age bracket is the sweet spot for buyers looking for a relatively modern car at a more manageable price.
The UK used car market recorded approximately 7.8 million transactions in 2025, with forecasts suggesting this will rise to around 8 million in 2026 - a 3% increase.
The shortage is not limited to newer used cars. Auto Trader's Marc Palmer has warned that five and six year old cars are about to see a supply drop of between 25% and 30% this year, with that figure potentially exceeding 35% in 2027.
This twin pressure is pushing competition across the whole market. Cars aged 10-15 years saw average prices rise by 8.5% year-on-year in December 2025 - the ninth consecutive period of strong increases in this bracket. When newer used cars are scarce and expensive, demand naturally shifts to older, more affordable options.
Despite the supply squeeze, headline used car prices showed remarkable stability through 2025. Auto Trader's Retail Price Index showed average prices fell by just 0.2% across the year, ending at £17,018 in December 2025.
In March 2026, the average used car price dipped to £17,556 - down 0.8% on the month - with average selling times falling to 25 days, five days quicker than February.
| Vehicle Type | Average Price | Year-On-Year Change |
|---|---|---|
| Petrol vehicles | £14,877 | Up 1.5% |
| Diesel vehicles | £14,025 | Up 2.5% |
| Electric vehicles | £22,174 | Down 9% (March 2026) |
| Nearly new (under 12 months) | £31,395 | Down 2.7% |
| Older vehicles (10-15 years) | £6,877 | Up 8.5% |
The split between fuel types is notable. Traditional petrol and diesel cars held their value well, while used electric vehicle prices came under pressure from aggressive manufacturer incentives on new EVs as carmakers pushed to meet Zero Emission Vehicle mandate targets.
The conflict in the Middle East, which escalated sharply from late February 2026, has disrupted the flow of oil and liquefied natural gas through the Strait of Hormuz - a narrow waterway that carries roughly 20% of the world's energy supply. Brent crude oil surged past $100 a barrel, and the impact has hit UK forecourts hard.
As of early April 2026, petrol is averaging around 156p per litre and diesel has surged past 188p. Diesel prices have risen by roughly 30% since late February, while petrol is up around 20%. A full 55-litre tank of diesel now costs close to £100 - up more than £21 in just six weeks.
The oil price spike is not just about fuel. It is pushing up the cost of repairs, parts, engine oil and tyres too - all of which feed through to higher car insurance claims and, eventually, premiums. Read our full guide on whether petrol prices are going up for the latest figures and what you can do to save.
For the used car market, the oil crisis has two key effects. First, it makes running a petrol or diesel car noticeably more expensive, which could push some buyers toward EVs. Second, it raises production and logistics costs across the board, which supports used car values rather than letting them fall.
Used EV prices have been falling steadily - down 9% year-on-year by March 2026, with the average used EV priced at around £22,174. But the Middle East crisis may be starting to change that picture.
Since the oil price surge began, interest in electric cars has jumped sharply. Auto Trader reported a 28% increase in leads on new EVs and a 15% rise for used EVs since the fuel price spike. EV leasing enquiries are up 36% since February 2026, and some used EV dealers have reported sales increases of up to 60%.
If the oil crisis continues through the summer, the combination of rising petrol costs and growing EV demand could slow or reverse the decline in used EV prices. EVs in the 3-5 year old bracket are already selling in just 25 days - faster than petrol equivalents - and that demand pressure typically leads to firmer pricing. Drivers thinking about switching to electric may find better value now than in a few months' time.
There are some reasons for caution. Previous fuel price spikes have boosted EV interest temporarily without always leading to sustained sales increases. Battery-electric cars still made up just over 23% of new car sales in 2025, below government targets. And the 3.7% of used car listings that are battery-electric means there is still limited choice compared to petrol and diesel.
The cost advantage for EV drivers is real, though. Under the April 2026 Ofgem energy price cap, a full home charge for a 60 kWh battery costs roughly £12-15 - enough for 200 to 250 miles of real-world range. That compares to roughly £85-100 for the same distance in a petrol or diesel car at today's pump prices. For more detail on how energy costs are being affected, see our guide on rising petrol and energy prices.
Car insurance premiums have actually been falling, providing some relief for drivers. According to the Association of British Insurers (ABI), the average motor insurance premium dropped to £551 in Q3 2025 - a 10% decrease compared to the same period in 2024. That marked three consecutive quarters of falling premiums after the sharp increases of 2023 and early 2024.
Insurance premiums fell 10% year-on-year to £551 on average, providing welcome relief after premiums peaked above £600 in 2024.
However, the relationship between used car values, fuel costs and insurance is not always straightforward. Several factors continue to put pressure on insurers and could slow further premium reductions.
| Factor | Detail |
|---|---|
| Rising repair costs | Modern vehicles feature complex electronics and sensors that make repairs more expensive. Repair costs hit £1.9 billion in Q3 2025 alone. Rising oil prices are now pushing parts and materials costs higher still. |
| Vehicle theft | The average theft claim increased by 3% to £11,800, with theft-related claims totalling £142 million in Q3 2025. |
| Record payouts | Insurers paid out £11.7 billion in car insurance claims during 2024 - a record figure that continues to influence pricing. |
| Oil price impact | Higher fuel and material costs push up claim values. EY forecasts insurers will pay out £1.11 for every £1 earned in 2026. |
If your car is now worth more than when you last insured it, your premium may not fall as much as the headline figures suggest. Always update your insurer if your car's value has changed significantly.
Want to reduce your insurance costs? Read our guide on how to lower your car insurance premium for practical strategies to save money on your policy.
The used car market outlook for 2026 was cautiously optimistic before the oil crisis added a layer of uncertainty. Here is what the latest data and forecasts suggest.
Used car transactions are expected to reach approximately 8 million - a 3% increase on 2025.
Supply of 5-7 year old cars is set to fall sharply (25-30%), intensifying competition in this key bracket and pushing some buyers toward older or younger stock.
Overall prices are expected to remain broadly stable, though the oil crisis may keep values firmer than expected by increasing running costs and logistics expenses.
Used EV prices could stabilise or start rising if fuel costs remain elevated and demand continues to grow - watch the market closely if you are considering switching.
Insurance premiums may face renewed upward pressure if rising oil prices push up claim costs, though the ABI's downward trend from 2025 may continue in the short term.
The key question is how long the Middle East disruption lasts. If the Strait of Hormuz remains restricted through the summer, the knock-on effects on fuel costs, repair prices and used car values could be significant.
With used car values holding firm and fuel costs climbing, comparing quotes regularly is more important than ever. Different insurers value vehicles differently and assess risk in their own ways, which can lead to big price differences for the same cover.
Not sure what all the insurance terms mean? Check out our car insurance glossary for clear explanations of every term you need to know.
Whether you are buying a used car or renewing your existing policy, understanding these market dynamics helps you make smarter financial decisions and keep your motoring costs under control.
Compare deals for your car - whether it is a newer model or an older vehicle that has held its value. Compare quotes from 130+ UK insurers via Brumble.
Compare Quotes NowOverall used car prices are broadly stable, with the average price around £17,556 in March 2026. However, there is a big split in the market. Older petrol and diesel cars (10-15 years) are rising in value, while used EVs are falling. The Middle East oil crisis may support petrol and diesel values further and could slow the decline in EV prices if demand for electric cars continues to grow.
The pandemic created a gap of roughly 2 million missing new cars between 2020 and 2022. Those cars would normally be feeding into the used market now, but they do not exist. This shortage is most severe in the 3-5 year old bracket and is now hitting the 5-7 year old segment too, with supply expected to drop 25-30% this year.
It is possible. Interest in EVs has surged since fuel prices spiked in late February 2026, with used EV enquiries up 15% and some dealers reporting sales increases of up to 60%. If demand continues to outpace supply, used EV prices could stabilise or start rising - particularly for popular models in the 3-5 year old range, which already sell faster than petrol equivalents.
Your car's market value is one of the factors insurers use to calculate your premium. If your car is worth more than expected, the potential payout on a total loss or theft claim is higher, which can push your premium up. Rising repair costs from the oil price spike add further pressure. Always keep your insurer updated if your car's value has changed significantly.
It depends on what you are looking for. Used EVs currently offer good value as prices are still falling, though that trend may reverse if fuel costs stay high. For petrol and diesel cars, the 5-7 year old bracket is about to get significantly tighter on supply, so if you are looking in that range, acting sooner rather than later could be wise. Comparing insurance quotes before you buy is always a smart move - use the comparison service via Brumble to see what cover would cost for any car you are considering.
Some analysts expect supply to begin improving from mid-2026 as vehicles return from extended finance contracts, which could ease prices slightly. However, the pandemic supply gap in the 5-7 year bracket will intensify through 2026 and into 2027. A significant price crash is unlikely - the more realistic expectation is a gradual easing rather than a sharp correction.
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